On Wednesday, crude oil had a dramatic dip on the release of EIA reports. The U.S. Energy Information Administration indicated a draw of 1.4 million barrels inventories, yet the traders continued to price in the trade war sentiments.

Trade War & Crude Oil

WTI crude oil came under heavy selling pressure after China announced it will counter against the latest series of U.S. tariffs on Chinese imports. This news came just a day after the U.S. Trade officials issued a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs, effective August 23.

How this impacts crude oil prices?

Increase the amount of tariff on the U.S. products will definitely make the U.S. crude oil expensive for the Chinese consumer. As a result, they will probably lower the demand and the U.S. stockpiles should build, placing a bearish pressure on prices.

WTI Crude Oil – Technical View

The technical side of the market is extremely bearish. Earlier today, we tried to catch quick retracement in crude oil, but the WTI prices reversed back before hitting our target.

WTI Crude Oil – 2 Hour Chart

For now, crude oil is holding in an oversold region. The series of doji and spinning top candlestick patterns are suggesting a potential of bullish retracement. But it will depend upon $66.50. Above this, the market can go after 38.2% retracement level of $67.45. The bearish breakout of $66.50 can extend sell-off until $65.75.
All the best and trade with care…